Purpose

To consolidate, disseminate, and gather information concerning the 710 expansion into our San Rafael neighborhood and into our surrounding neighborhoods. If you have an item that you would like posted on this blog, please e-mail the item to Peggy Drouet at pdrouet@earthlink.net

Tuesday, October 22, 2013

Black Market for Counterfeit Goods Rakes in $500 Billion Yearly

Asked on the No 710 on Avenue 64 Facebook page:

Is
it worth spending billions on a tunnel that will damage the health of
residents, reduce the quality of life in our communities, and encourage
greenhouse gas emissions; FOR THIS?????

At a rooftop police parking lot in downtown Los Angeles, a final briefing for a joint task force of the FBI and the LAPD.

When the questions ... and the donuts ... are finished, the agents
and officers mount up and fan out. Soon they are racing up the stairs at
a nearby building. No, this is not a drug bust. These officers are with
the LAPD's Vice Squad searching for something far more profitable than
drugs.
Counterfeit goods.

Yves St. Laurent, Gucci, Hermes, Ray Ban ... all of it fake.

Officer Rick Ishitani has been on the counterfeit beat more than a
dozen years and does busts 30 to 35 times a year. Counterfeit goods --
from luxury handbags to DVDs -- are a huge problem. Trade groups claim
criminals steal copyrighted material worth half a trillion dollars every
year. Counterfeit goods account for nearly 10 percent of worldwide
trade, an estimated $500 billion annually, according to the World
Customs Organization.

While that estimate may be grossly inflated -- like the price of some
luxury goods -- the losses to big brand names are big enough to make
copyright enforcement a huge priority for the customs service.
The front line in the fight is at the Ports of Los Angeles and Long
Beach, the biggest in the United States. More goods come through these
ports than all other major American ports combined, approximately 40
percent of all maritime cargo. That's because this is the first stop for
almost everything the U.S. imports from China, Japan and Korea.

ABC News “Nightline’ embedded with the U.S. Customs and Border
Protection to see how they lead the effort to police counterfeit goods.
With the tsunami of goods coming in every day, it’s a significant
challenge to find the contraband, like finding a needle in a haystack.

Before a vessel even sets sail from China, a manifest describing the
contents of each container arrives here in Los Angeles. Ken Price, a
senior import specialist with the CBP, searches for the needle before
the haystack even gets here. After 20 years on the job, he has a good
eye for things that are out of the ordinary, just on the paperwork. He
and other inspectors look for anything amiss and cross-reference the
import manifests against patterns they've seen before.

All of which takes place days -- even weeks -- before the ship even
ties off. It has to be that way because there's simply too much to
search.

Today, as we board this vessel, the customs officers have a pretty
good idea where to look. As immigration clears the captain and crew, the
inspectors are already doing a preliminary search. They can take their
time. A ship this size will take days to unload.

Among the most urgent priorities are things that might pose a health or a safety threat -- radioactive material, for one.

The scanners indicate the presence of radiation on this truck so it
will have to go through secondary inspection. In this case, thankfully,
apparently not radiation that poses any threat.

Anything flagged, based on the manifest, goes through the RPM scanner
-- short for Radiation Portal Monitor, sort of an X-ray device. But if
the container is in any way suspicious – anything odd-shaped, for
example -- customs agents open it on the spot.

The goods that are impounded for secondary inspection end up in a
warehouse a few blocks away from the port. CBP Supervisor Bryan Nahodil
shows “Nightline” a shipment of fake Hermes bags, 16,000 of them.

“When the officers go through our targeting system, what they saw was
the importer on record was listed as a home and garden store,” said
Nahodil. “But the commodity itself was manifested as handbags, so that
didn't add up.”

The bags sure add up, though. If they were real, this shipment would
be worth more than $210 million. On the black market, the fakes would
fetch just $300,000.

It may all seem like a victimless – and perpetrator-less – crime. But
the customs guys take umbrage at that suggestion. Or that, through
enforcement efforts like this, the U.S. government is helping to prop up
the artificially high price of luxury goods targeted by the knock-off
artists. They insist it isn't just the makers of $4,000 bags which are
harmed by counterfeit imports. These imports are a criminal’s ATM
machine.

“I highly doubt the money that the importer or the manufacturer would
gain from importing these handbags is gonna go to pay someone's college
fund,” explained Nahodil. “More than likely, it's gonna go to finance
some other illicit activity, whether it be terrorism, human trafficking,
drugs or some such.”

And it isn't just luxury goods that get knocked off. Jonathan Gelfand
is general counsel of Beachbody, LLC, makers of P90X, Insanity and
other popular workout videos. For every real set of workout videos,
there's a fake that's virtually indistinguishable. The company has
several full-time employees whose only job is to search constantly
online, looking for deals on Beachbody products that are too good to be
true.

“It costs us close to $75 million a year,” said Gelfand. “And that's what we can track.”

That's 10 percent of the company's revenues. Money that doesn't go to new products or employees or to investors.

Back at that LAPD bust, the 24-year-old guy who runs this back-alley counterfeit shop pleads for leniency.

“We won’t ever say it’s a losing battle because every step we make is a gain for us,” said the LAPD's Ishitani.

Even a raid like this one is just a drop in the bucket, he says, and there is an ocean of illegal goods to police.